Sub Pop Leaning Towards Giving Away The Infinite And Charging For The Scarce

from the good-for-them! dept

If you like good music, you're almost certainly aware of the iconic indie label Sub Pop. Apparently, Sub Pop's creative juices aren't just focused on putting out great music these days, but they're considering how to adapt their business model to the changing music landscape, and I'm happy to see that they seem to have realized the key point that I've been making for years: infinite goods make scarce goods more valuable, so free the infinite and sell the scarce. Sub Pop is apparently considering starting to give away new music, while focusing on selling tangible goods related to the music (found via Hypebot):

"Although Sub Pop is primarily known for its many fine artists and their really very fine recordings (also grunge), we're not at all opposed to expanding into the fine world of t-shirts, hats, beer cozies, and key chains," Jaspers says. "We used to give many of these tchotchke items away for free in an effort to entice people to pay for the music, but we're considering flipping our strategy so that people pay for the toy and receive the music for free. Just a thought."

Basically, it's a recognition that people want the music, but they're also willing to pay for a physical good as something of a "souvenir" or additional scarce and valuable "art" that is made more valuable by the connection to the music. Sub Pop's art director, Jeff Kleinsmith, is apparently looking to go in creative directions with this:

Regardless of age, there's always going to be people who prefer to touch and make stuff that's like, physical. CDs may end up being little books. We've talked about this at work, where you might spend the time to do a cool package, it just doesn't have a disc in it. And instead of a disc, you've got a little piece of paper that says "go here for your download." So you're getting everything about it except for that plastic disc, you know. I would love to see that.

And that could be a magazine, it could be a shirt, it could be a sticker on a banana, it could be anything, really, that has that download. It could be a poster, a thing associated with this music.

Of course, we've seen some examples of this already. Earlier this year, we talked about a Swedish band that was releasing its latest album as a magazine. Last year, Mos Def tried releasing his latest album as a t-shirt with a download code. And, we just wrote about Kristin Hersh's latest album being released as a book. The idea, of course, is to give fans a real reason to buy beyond just the music -- which is effectively free for many people. But providing scarce value can really do amazing things.

Of course, considering it sounds like the Sub Pop folks are still thinking about this, they might want to consider that selling scarcities can also expand a bit beyond just selling tangible goods. There are intangible scarcities that go well with music as well -- including things like access and attention. Either way, it's great to see such an iconic label realizing that there could be serious value in embracing (rather than complaining) about "free" within a business model, and looking at opportunities to use it to their own advantage.

just forestalls the inevitable.

Someone sent this to me (from the Seattle Weekly) a little while ago and I was wondering how long it would take for TD to pick up on it.

This is basically a 360 deal where the music is given away but the record company makes money from everything else. Kind of like an interest-only mortgage.

It's an interesting idea but ultimately dumb and pointless. If I'm an artist, why would I want to sign with a "label" like this at all? Maybe to get some exposure for a couple of years, after which I hire some 25-year-old to do it all myself on Zazzle and keep more of the money. An organization that does this has no future.

Read the Epilogue to Fred Goodman's new book "Fortune's Fool." He explains the futility of this strategy better than I can here.

Re: just forestalls the inevitable.

This is basically a 360 deal where the music is given away but the record company makes money from everything else. Kind of like an interest-only mortgage.

No. This is not like a 360 deal at all. You are confused.

The deals we're talking about aren't ones where the label gets to demand a cut of all revenue -- but ones where the label specifically adds additional value and gets a cut of *that* revenue, which seems fair.

It's an important difference.

360 deals are a joke -- we agree. But a record label exploring other revenue options does not automatically mean a 360 deal.

It's an interesting idea but ultimately dumb and pointless. If I'm an artist, why would I want to sign with a "label" like this at all? Maybe to get some exposure for a couple of years, after which I hire some 25-year-old to do it all myself on Zazzle and keep more of the money. An organization that does this has no future.

If you really think we're talking about doing what can be on Zazzle, you're not paying attention.

Re: Re: just forestalls the inevitable.

"No. This is not like a 360 deal at all. You are confused.

The deals we're talking about aren't ones where the label gets to demand a cut of all revenue -- but ones where the label specifically adds additional value and gets a cut of *that* revenue, which seems fair."

No. If you talk to a major record company person (or read Goodman's book), you will find that the 360 deal as you describe it is a precursor to what the record companies really want to set up is what Sub Pop is contemplating... plus actually selling the music for money.

Zazzle is a useful shorthand here. Zazzle will put logos on pretty much anything (no, I don't know for sure whether they do fruit). Now let's break down your other examples:

- Magazines. This is like selling advertisements, except more expensive and time-consuming to produce - a loser.

- Access and attention: what exactly are we talking about here that a record label could sell? Spotify and Rhapsody sell "access." Beyond that, if I'm an artist and I (following Kevin Kelley's 1000 True Fans model) want to offer $5000 personal in-home performances or $100 personal phone calls, why should I give a piece of that to the record company? What a record company should be doing is developing and promoting artists.

Let's put it this way (and see the next comment, who gets this argument right): in Sub Pop's case, they ought to be licensing music to clothing companies, who give you an iTunes download code for (OK, I'm going to sound dated) the latest Alice in Chains album when you buy a grungewear shirt. Just like the Prince model with that UK newspaper, which I thought was pretty smart. This model has it backwards.

'Although Sub Pop is primarily known for its many fine artists and their really very fine recordings (also grunge), we're not at all opposed to expanding into the fine world of t-shirts, hats, beer cozies, and key chains,' Jaspers says.'We used to give many of these tchotchke items away for free in an effort to entice people to pay for the music, but we're considering flipping our strategy so that people pay for the toy and receive the music for free. Just a thought.'"

Re: Re: Re: Of course you could just eliminate the music

Re: Of course you could just eliminate the music

Why eliminate the music though? The "toys" become more valuable when tied to something else that you like. To take an example from real toys, do you think kids all just started wanting red shiny cars just recently? Of course not, they wanted Lightning McQueen toys. Honestly, I'm surprised Hasbro didn't try to buy Pixar. I'm still surprised Hasbro doesn't have their own movie division.

But I digress. The reason for not eliminating the music is that it makes the "toys" more valuable.

Re: Re: Of course you could just eliminate the music

Well, if the toy is cool enough, it will likely sell itself. Sure, you can use the music to enhance the sale, but I'm trying to point out that when the emphasis starts to be placed on the toy, the music becomes the promotional tool rather than the focal point. People start to make their decisions based on the value of the toy to them, because the music itself they don't have to pay for. That they get for free, so it is the toy that becomes the deciding factor.

Or, for that matter, if the music is just the exposure vehicle, perhaps you can have the musicians donate the music, and then Sub Pop sells the toys. That's how some retailers do it. They get the music for free to enhance the sales of their own merchandise. They are retailers of merchandise and the music is given to them to gain exposure to the retailers' audience.

Re: Re: Re: Of course you could just eliminate the music

Well, if the toy is cool enough, it will likely sell itself.

Again, why do labels put music on those blank plastic discs they sell. According to you, they're just selling plastic discs, and so they're not in the music business at all. The plastic discs will just sell themselves.

Get the point? It's the music that sells the plastic discs, and it's the music that sells these other items.

Grunge Speak Anyone?

Are we sure this isn't just Sub Pop being subversive? They make a joke about their "fine" bands--which they have a recorded history of treating pretty badly (see: Nirvana, Mudhoney, Soundgarden; all of whom never had much good to say about Sub Pop). Along with a statement about "really very fine recordings" which is patently ridiculous. (Much love to Jack Endino, though! I love his production style, but precisely *because* the recordings are skin of your teeth minimal)

I kind of suspect this is more of an indictment against the models proposed at sites like TD. I'm not sure, though, we'll have to see if Jaspers clears this up at all. As for now, I'd put my money on the guess that Sub Pop is being ridiculous and we're just falling for the joke.

But then again, this is a label whose biggest selling commodity was a T-shirt emblazoned with the slogan "LOSER" until 1990 when they "sold" their contract with Nirvana (not sure if "sold" is the right term, but you know what I mean). They also started out on a non-traditional subscription basis, so the label does historically know how to make money on ancillary product.

Of course, this was all when the label was run by Bruce Pavitt and Jonathan Poneman, who were pretty out there characters. I'm not sure what the current corporate structure of Sub Pop is like.

Not that the idea here is unsound. But I learned a long time ago not to trust anything that comes out of Sub Pop's offices: Sub Pop on 'Grunge Speak'

Re: Re: Re: Grunge Speak Anyone?

This is true. One reason I loved (LOVED!) the bands of my youth--several of them on the Sub Pop label, actually--was that a lot of them were stridently opposed to merchandising (Fugazi springs to mind, though they weren't on SP). I remember long before the advent of mp3s and free music, I was opposed to the idea of merchandising as a musician. Specifically, I remember saying "I'm not a clothing designer." (Except for my band's glorious "FUCK MERCH" t-shirts. Irony IS mad profitable)

Now I'm not so young. Ideals are one thing, but broken guitars, amps, pedals, turntables, and records, etc that have to be repaired or repurchased before you can play out again are a hard, expensive reality. (2 things that are often overlooked when speculating on how a band can make money: 1) Playing shows often costs money. I generally have to cart 3 turntables, a sampler, a guitar, and many effects pedals to play a show. I don't own a car in NYC, so it usually takes 2 cab rides to move everything (4 total, to get everything home), which pretty much blows right through any money we make at the door or selling merch. And 2) why doesn't anyone factor "looks" into these equations? That is STILL the single most important aspect of succeeding as a musician. If you're not cute, you'll be hard pressed to just "end up" with a video on Youtube. Sad but true.)

Technically isn't this just Mattel's strategy from the 80s (and probably before)? I mean, I could watch Transformers and G.I. Joe for free every afternoon (they even came with catchy songs!), but the focus was the toys being sold. In fact, I remember Transformers: The Movie (1986) specifically being indicted as "an hour and a half long toy commercial."

FULL DISCLOSURE: I'm not at all opposed to TD's message of giving away your music. It's precisely what my band has always done, except for a brief flirtation with the music industry when we were set up with managers and handlers who ABSOLUTELY would not work with us if we were just giving stuff away. THANKFULLY, we spent 10 years recording our own music on our own dimes, possessed ALL the rights and were able to walk away unscathed when we decided that we actually liked it under our rock and would rather play for friends of friends of friends at house parties. (what's the apropos Sub Pop song that fits here? I think it goes "Come and join us 'cause it's lonely underground...") We don't make a lot of money, but we never would have. And our music is so copyright infringent that we wouldn't have been allowed to even *record* an album before the advent of cheap digital audio programs.

Re: Re: Re: Re: Grunge Speak Anyone?

Ah yes. And the record labels are in the plastic disc business. They should stop putting music on them, because that's not what they're selling, right?

Hasn't that been the confusion? Some people thought they were in the plastic disc selling business. Now that they have figured out they aren't in the plastic disc business, some of them have eliminated those. And if they are now giving away the music, they aren't in the music selling business anymore either.

You have to figure out what people are really paying you for to know what to sell.

For those who aren't familiar with this classic article, I'll point you to this:

Here's an example

I'm standing on a street corner singing. I'm also selling apples. The singing is free and draws people in. But what I am selling are apples. I'm in the apple selling business. The singing may catch people's attention as they walk by, but I am selling apples.